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What Conflict? Auto Companies Take 'Relaxed' Approach to Publicis-Omnicom

VW, Toyota, Nissan, GM Say They See No Issues With New Holding Company

When you think about car companies, "relaxed" is not the first word that springs to mind -- especially when it comes to the competition. But that's how Volkswagen AG described the attitude of senior executives at its global headquarters in Wolfsburg, Germany, about the proposed merger of Omnicom and Publicis Groupe.

Omnicom's DDB handles VW in many countries around the world. Under the deal, much of VW's ad business will be parked within the same corporate entity as General Motors, since Publicis' Leo Burnett has Buick and GMC in the U.S.

But VW -- like GM, Toyota and the Nissan-Renault alliance -- said it's not concerned about an apparent conflict.

Like the laid-back gent from this year's Super Bowl ad, VW is taking the merger in stride.

"Volkswagen is very relaxed about this. There already are other advertising agencies operating under the corporate roof of Omnicom that work for our competitors," said spokesman Eric Felber in a statement to Advertising Age Wednesday. "There was always a clear separation between the individual subsidiaries and their respective clients in the auto industry and we expect that this will not change after the planned merger between Omnicom and Publicis."

Volkswagen's public stance indicates the issue of conflicting auto accounts may be much less of a problem today than it might have been a few decades ago. Indeed, in the case of VW and GM, the two automakers are already sharing a holding company in Interpublic Group of Cos. Interpublic's Deutsch handles VW in the U.S., Commonwealth handles Chevy and Rogue handles Cadillac.

For its part, a General Motors spokesman said earlier this week that the company "will work with the new entity, but we don't anticipate any issues."

More heated rivals?
But what about more traditional rivals, like Toyota and Nissan? The Japanese carmakers compete directly in both the mainstream and luxury markets with their Toyota/Lexus and Nissan/Infiniti car lineups. Their longtime ad agencies -- Publicis' Saatchi & Saatchi for Toyota and Omnicom's TBWA/Chiat/Day for Nissan -- operate only a few miles from each other in the Los Angeles area.

But Toyota and Nissan are not balking about being under the same roof.

"Saatchi and Saatchi LA has assured Toyota that the merged entity will be respectful of client proprietary information," said Toyota Motor Sales USA spokesman Mike Michels in a statement. "As in the past, the agency has gone to great lengths to protect Toyota from exposure of confidential information and we fully expect that will be the case going forward."

The Nissan-Renault alliance was the most effusive about the deal in a statement issued by Nissan Americas spokesman Dave Reuter: "Renault and Nissan are both major global clients of both Publicis and Omnicom. We welcome the direction taken by Publicis and Omnicom to create a best-in-class communications, advertising, marketing and digital services company and will continue to work with them during the transition period and beyond."

Then again, the Omnicom-Publicis deal was just announced. Automakers might be playing it cool publicly. But over the next few months, tension among auto executives could build up like code blue in the boiler room.

The executive-ego wildcard
Retired ad executive Scott Gilbert, who handled the Toyota and Lexus business as CEO of Team One and Saatchi & Saatchi, described the merger as a "non-event" for the thousands of worker bees at the auto companies and their agencies. But potential conflicts could be used as an excuse by frustrated auto executives to make an agency switch they wanted to make anyway. Or provide an opening to stir up trouble about not being included in the memo.

The real people to watch out for, Mr. Gilbert warned, are the "near-top-executive level" clients who may become piqued by inattention.

"I don't think there are any real conflict issues: it's all accountant BS. But it could be used an excuse to rattle sabers or do something that's somebody's dying to do anyway," Mr. Gilbert said. "It just creates a sense of powerlessness with clients at the operating level; that they have no authority or control over these [agency] relationships. That's frustrating. That's not a good thing.

"You'll have Maurice Levy and John Wren going to all these clients. They may get out at the senior level. But there's a lot of [lower level] people who think they're important who are never going to see the top guy."

Conflict casualty
While it might be tempting to dismiss conflicts as a relic of 20th century advertising, other sectors might not be as open to the merger as the auto industry. Industry analysts will be closely watching archrivals Coca-Cola Co. and PepsiCo in the wake of this deal. And one of WPP's selling points is its willingness to create shops tailor-made for one client.

It only takes one disgruntled client to get its back up over the deal. Agencies have risen and fallen on conflict issues.

Take the late, lamented DMB&B an Anheuser-Busch agency closed by Publicis in 2002. What really sent it down the road to oblivion was its decision to allow sibling agency Televest to handle some media buying for Miller in 1993.

DMB&B and its predecessor agencies had created "This Bud's for You" and the "King of Beers" slogans for Budweiser and helped turn it into the country's best-selling beer.

Anheuser-Busch was furious about the Miller business. As punishment, it moved its flagship Budweiser account to DDB Needham, Chicago. As DMB&B's relationships with the St. Louis brewer continued to crumble, the winner that picked up most of the broken pieces was Omnicom's DDB.